Threat of Benefit Cuts in Wisconsin Prompts Wave of Sudden Retirements

On Friday night, the eve of a massive rally in Madison, Wisconsin, against Governor Scott Walker's union-busting "budget repair bill," a few state employees gathered for a hasty retirement party at Jenna's, a downtown bar directly across from the Capitol building.

Over pitchers of beer, a group of lawyers from the state public defender's office were saying goodbye to Patrick Donnelly, longtime attorney at the agency.

Donnelly decided to retire on Wednesday--24 hours after he and his colleagues were informed by labor lawyers at the Boardman law firm that a provision in Governor Walker's bill could mean he would lose health care benefits worth tens of thousands of dollars, unless he gave notice immediately.

Two days after he made his decision, on Friday, he walked out the door for the last time. (He is taking a long-planned vacation and using furlough days to make up the rest of his two weeks' notice.)

"I'm as angry as I've ever been in my life," Donnelly said at his retirement party.

Across the state, record numbers of public employees are requesting retirement papers. Many, like Donnelly, have been advised that if they don't get out quickly, they stand to lose hundreds of thousands of dollars in benefits they were counting on for retirement.

The effect on the state could be devastating. The number of people retiring from the public sector in the next two weeks could easily dwarf the 12,000 lay-offs the governor has threatened, if Senate Democrats don't return to pass his bill ending collective bargaining for public employees.

The Wisconsin Department of Employee Trust Funds reports that, during the week of February 14-18, 2011, it received more than three times the num ber of requests for retirement estimates than it did the same week in 2010.

At the top of the Department web site is a special link for state and local employees: "Retiring on Short Notice? What Members Should Know and Do."

The volume of requests for information is so high, the web site notes, that it is having trouble keeping up with demand.

Walker has promised to make all state employees contribute 12 percent of their pay to their health care premiums and 5.8 percent to their retirement benefits, which will mean $500 to $600 out of pocket each month for many staff who already don't make much money. "The less you make the harder it is to pay," Donnelly points out.

So all public employees are looking at very lean times to come. But those close to retirement age are heading for the doors if they can, because they stand to lose benefits they had accrued and counted on for years.

"I get to walk away from this. I was close to retiring anyway, and, as attorneys, we operate at the highest level of state salaries. But for the young people and the clerical staff in our office, these cuts are going to be devastating."

Then there are the longterm issues for the state: jobs that will likely go unfilled as experienced people leave, and brain drain as public sector work looks increasingly unattractive to people who had been considering a career in public service.

Donnelly mentions some friends who helped draft Wisconsin's clean air and water standards in the early 1980s--brilliant lawyers, all of whom have gone on to other careers. "Never again will we be able to hire people like that," he says.

Or, as Steve Phillips, a colleague of Donnelly's in the appellate division of the public defender's office put it, "You'd have to be an idiot to go into public service now--or be independently wealthy."

"I've been with the state for 33 years and that whole time I've been planning for a pension and we've been negotiating contracts," Phillips says. "Compared to the private sector, our base pay is much less and partly that's because we get decent benefits."